1. Chapter 13 E-Commerce Contracts
PowerPoint Slides to Accompany ESSENTIALS OF BUSINESS AND ONLINE COMMERCE LAW 1st Edition by Henry R. Cheeseman
Chapter 13
E-Commerce Contracts
Slides developed by
Les Wiletzky

2. The Internet and World Wide Web
E-Commerce
The sale of goods and services by computer over the Internet
Internet
A collection of millions of computers that provide a network of electronic connections between computers
World Wide Web
An electronic connection of computers that support a standard set of rules for the exchange of information

3. Uniform Computer Information Transactions Act (UCITA)
A model act that provides uniform and comprehensive rules for contracts involving:
computer information transactions
software licenses
information licenses

4. Electronic Mail (E-mail)
Electronic written communication between individuals using computers connected to the Internet
Controlling the Assault of Non-Solicited Pornography and Marketing Act
Called the CAN-SPAM Act
Prohibits spammers from using falsified headers in messages
Requires spammers who send sexually oriented to properly label it as such

5. E-Mail and Web Contracts
is sometimes the method used to negotiate and agree on contract terms and to send and agree to the final contract
Assuming that all of the elements to establish a contract are present, an contract is valid and enforceable
Electronic contracts meet the writing requirements of the Statute of Frauds for most contracts

6. Electronic Signatures
Electronic Signature in Global and National Commerce Act (E-Sign Act)
Recognizes and gives electronic signatures the same force and effect as a pen-inscribed signature on paper
The act is technology neutral
i.e., the law does not define or decide which technologies should be used to create a legally binding signature in cyberspace
The act specifies ways to verify electronic signatures

7. Domain Names
Domain name – a unique name that identifies an individual’s or company’s Web site
Internet Corporation for Assigned Names and Numbers (ICANN)
Approves registrars of domain names
Domain names may be registered by filing the appropriate form with the domain name registration service and paying the appropriate fee

8. Anticybersquatting Consumer Protection Act of 1999
Aimed at cybersquatters who register Internet domain names of famous companies and people and hold them hostage by demanding ransom payments from the famous company or person
The name must be famous
The domain name was registered in bad faith

9. E-Commerce and Licensing (1 of 2)
Intellectual property and information rights are valuable assets of individuals and businesses
License – a contract that transfers limited rights in intellectual property and informational rights
Licensor – The owner of intellectual property or informational rights who transfers rights in the property or information to the licensee

10. E-Commerce and Licensing (2 of 2)
Licensee – The party who is granted limited rights in or access to intellectual property or informational rights owned by the licensor
Exclusive License – a license that grants the licensee exclusive rights to use informational rights for a specified duration

11. Licensing Arrangement
Licensor
License
(transfer of rights in intellectual property or information)
Licensee

12. Licensing Agreement
Detailed and comprehensive written agreement between the licensor and licensee
It sets forth the express terms of their agreement

13. Electronic Errors (1 of 2)
The Uniform Computer Information Transactions Act (UCITA) provides that consumers are not bound by their unilateral electronic errors if the consumer:
Promptly upon learning of the error notifies the licensor of the error
Does not use or receive any benefit from the information, or make the information or benefit available to a third party

14. Electronic Errors (2 of 2)
Delivers all copies of the information to the licensor or destroys all copies of the information, pursuant to reasonable instructions from the licensor
Pays all shipping, reshipping, and processing costs of the licensor [UCITA § 217]
Section 217 of the UCITA only applies to consumers who make electronic errors in contracting

15. Express Warranty
Any affirmation of fact or promise by the licensor about the quality of its software or information
The UCITA does not require a licensor to make an express warranty about the quality of its software or information [UCITA § 402]
The UCITA permits a licensor to disclaim all implied warranties [UCITA § 406(c)]

16. Breach of License Agreements (1 of 2)
The parties to a contract for the licensing of information owe a duty to perform the obligations stated in the contract
If a party fails to perform as required, there is a breach of the contract
Breach of contract by one party to a licensing agreement gives the non-breaching party certain rights, including recovering damages or other remedies [UCITA § 701]

17. Breach of License Agreements (2 of 2)
Licensee’s refusal of defective tender
Licensee’s revocation of acceptance
Adequate assurance of performance

18. Remedies
The UCITA provides various remedies that injured parties can obtain against breaching parties:
Cancellation
Licensor’s damages
Licensor’s right to cure
Licensee’s damages
Specific performance
Liquidation of damages

19. Limitations of Remedies
The UCITA provides that the parties to an agreement may limit the remedies available for breach of the contract
Limitation of remedies in licenses subject to the UCITA are enforceable unless they are unconscionable [UCITA § 803]

20. Electronic Communications Privacy Act (ECPA)
Makes it a crime to intercept an “electronic communication”
At the point of transmission
While in transit
When stored by a router or server
After receipt by the intended recipient
Makes it illegal to access stored as well as in transmission